The Big Three
The COLCAP rebounded 0.86% to close at 2,300.66 in a relief rally after the prior week’s selloff, with the index reclaiming the key 2,300 level. The session opened at 2,287.72, dipped to 2,280.79, then rallied to a high of 2,311.02 — a bullish reversal pattern that suggests the selling pressure from the BanRep crisis is beginning to exhaust.
The May 31 presidential election is now 55 days away and markets are shifting from reaction mode to positioning mode. The race pits Petro’s successor Iván Cepeda (Historic Pact) against Paloma Valencia (Democratic Center), with centrist Sergio Fajardo a potential swing factor. Petro’s approval has rebounded to 49% — far higher than the 26% low in mid-2024 — making the election genuinely competitive and the outcome uncertain for markets.
The peso trades near COP 3,660 per dollar but faces depreciation pressure, with most forecasts centering on COP 4,000–4,200 by year-end and Capital Economics’ pessimistic scenario reaching COP 4,600. The fiscal deficit is projected above 5% of GDP, the fiscal rule remains suspended through 2027, and BanRep’s 11.25% policy rate is crushing credit — creating a stagflationary backdrop for the election campaign.
01 Market Snapshot
| Indicator | Value | Change |
| COLCAP Close | 2,300.66 | +0.86% (+19.71 pts) |
| Session High | 2,311.02 | — |
| Session Low | 2,280.79 | — |
| USD/COP | ~3,660 | YE forecast: 4,000–4,200 |
| Policy Rate (BanRep) | 11.25% | two 100bp hikes |
| Headline CPI (Feb YoY) | 5.3% | core: 5.5% |
| Presidential Election | May 31 | 55 days |
| Fiscal Deficit (proj.) | >5% of GDP | rule suspended |
02 Equities — Relief Rally Reclaims 2,300
The COLCAP Colombia today bounced 0.86% to close at 2,300.66, reclaiming the psychologically important 2,300 level after a turbulent week dominated by the BanRep–government standoff. This is part of The Rio Times’ daily coverage of Colombia’s stock market and Latin American financial markets.
Friday’s session produced a constructive reversal: the index opened at 2,287.72, dipped to a session low of 2,280.79 in early trading, then rallied steadily to close near the session high of 2,311.02. The low-to-high range of 30 points — modest by recent standards — suggests the volatility from the BanRep crisis is settling into a more orderly trading pattern. The index now sits just below the resistance band at 2,302–2,316, the zone that has capped rallies since mid-March.
The recovery follows GDP data showing Colombia grew 1.7% in 2024 and 2.6% in 2025, with private consumption and remittances driving the expansion. Investment recovered 7.6% in 2024 after a 14% decline in 2023, though it remains below 2019 levels — a lingering sign of reform uncertainty under Petro.
03 Election — The Two Colombias
The May 31 presidential vote is becoming the dominant market variable. Iván Cepeda, Petro’s chosen successor from Historic Pact, represents continuity of the left-wing project — higher minimum wages, expanded social spending, and the “Total Peace” framework with armed groups. Paloma Valencia of the Democratic Center represents the conservative opposition — fiscal discipline, stronger security, and closer U.S. alignment. Centrist Sergio Fajardo remains in the mix as a potential kingmaker in a likely runoff.
The election calculus has shifted: Petro’s approval rebounded to 49% from a low of 26% in mid-2024, buoyed by the record minimum wage hike and his framing of inequality as Colombia’s central issue. Americas Quarterly reports that “no one was counting out the left” — a significant change from the assumption that Colombia would follow the regional rightward trend. For markets, a Cepeda victory would likely mean continued BanRep confrontation, persistent fiscal deficits, and potential constitutional reform; a Valencia victory would signal a return to orthodoxy, fiscal rule restoration, and warmer U.S. relations. The COLCAP is pricing neither outcome with confidence, hence the range-bound trading.
04 Technical Analysis — COLCAP Daily
The COLCAP closed at 2,300.66, sitting just below the resistance cluster at 2,302–2,316 that has capped the index since February. The chart has shifted to a wider timeframe, now showing price action from April 2025 through April 2026 — revealing the full extent of the rally from the April 2025 lows near 1,400 to the February 2026 highs above 2,400. The index is trading in the upper half of this range but has been consolidating since the BanRep crisis erupted.
Key moving averages: the index is above the 2,250 support zone (which held during last week’s selloff) and well above the 200-day MA near 2,011. The Bollinger Bands show the index near the midline, with the upper band at 2,316 and lower band near 2,139. The MACD at 14.24 is barely positive, with the signal at −3.81 and histogram at −18.05 — momentum is flat, consistent with a market in consolidation rather than trending. The RSI at 56.36 is neutral. A secondary oscillator at 46.76 confirms the wait-and-see stance.
05 Key Levels
| Level | COLCAP |
| Upper Bollinger / Resistance | 2,316 |
| Resistance Zone | 2,302–2,309 |
| Current Close | 2,300.66 |
| Support 1 | 2,250 |
| Support 2 (MA cluster) | 2,222–2,233 |
| Lower Bollinger | 2,139 |
| 200-Day MA | 2,011 |
06 News in Focus
ELN Collapses Peace Process — Security Crisis Escalates
The ELN guerrilla group’s peace process with the government has collapsed after the group resumed attacks in January 2026, killing over a hundred people and displacing approximately 55,000 in northeastern Colombia. A partial positive: in April 2025, the Comuneros del Sur — an ELN splinter — formally relinquished weapons, the first such action under Petro’s “Total Peace” framework. But the broader security picture is deteriorating sharply, with violence in Chocó, Cauca, Nariño, and Arauca disrupting mining and energy operations. The 2025 assassination of presidential candidate Senator Miguel Uribe heightened fears of a return to political violence ahead of the election.
Fiscal Deficit Widens Beyond Expectations
Colombia’s fiscal situation has deteriorated further than most forecasters anticipated. The deficit is now projected above 5% of GDP for 2026, well beyond the 4% level cited earlier this year. The fiscal rule remains suspended through 2027 — Colombia is the only investment-grade Latin American country to have taken this step. The Senate’s rejection of the finance bill left a $4.2 billion budget hole, and the Constitutional Court struck down Petro’s emergency tax decree for the third time. Public debt hovers above 60% of GDP, and Morgan Stanley has warned the next administration will “inherit a difficult fiscal situation” regardless of party.
Peso Faces Structural Depreciation Pressure
The peso at COP 3,660 per dollar in early April appears relatively stable, but analysts see significant depreciation ahead. BBVA Research and Capital Economics project COP 4,000–4,200 by year-end in base scenarios, with pessimistic projections reaching COP 4,600. The drivers: the suspended fiscal rule, election uncertainty, the BanRep confrontation, the widening current account deficit, and the potential for commodity price shocks if the Iran conflict escalates. A Cepeda victory would likely accelerate peso weakness; a Valencia victory could stabilize or strengthen the currency.
UN Security Council Reviews Colombia in April
The UN Security Council will hold its quarterly meeting on Colombia this month, with the Verification Mission set to brief on developments since December. Key topics: the March 8 legislative elections (in which the Comunes party — former FARC-EP members — failed to win any seats for the first time), the collapse of the ELN peace process, and the broader security trajectory ahead of the presidential vote. The US is expected to stress the need for Colombia to curb illicit drug production, with coca cultivation remaining at 253,000 hectares.
07 Global Context
Colombia’s rebound occurred against a stabilizing global backdrop after the prior week’s Liberation Day anniversary volatility. Oil prices remain elevated, supporting Ecopetrol revenues but adding inflationary pressure. The U.S.–Colombia relationship has improved modestly since the January Trump–Petro call and February White House visit, but Trump’s accusation that Petro is “an illegal drug dealer” and the drug-trafficking decertification continue to cast a shadow. Gold’s surge above $4,784 per ounce benefits Mineros and the broader mining sector. The carry trade appeal of BanRep’s 11.25% rate supports peso inflows despite the institutional risks — a paradox that mirrors the Colombia economy’s broader contradictions.
08 Looking Ahead
The COLCAP is now in a consolidation phase, trading between 2,250 support and 2,316 resistance. A break above 2,316 would signal renewed bullish momentum and target the February highs near 2,400; a break below 2,250 would re-test the 2,222–2,233 support cluster and potentially the lower Bollinger at 2,139. The flat MACD and neutral RSI at 56.36 suggest the index could go either way — and the election will be the deciding factor.
Key catalysts for the week ahead: the UN Security Council’s quarterly Colombia review; the April inflation print, which will determine whether BanRep‘s terminal rate reaches Bancolombia’s 12.75% scenario; any signals on whether Finance Minister Ávila will attend the next BanRep board meeting; and early polling data as the May 31 vote approaches. The Santa Marta fossil fuel conference (April 28–29) remains a medium-term risk for energy sector sentiment. This is, as our comprehensive country guide published yesterday notes, one of the most consequential elections in Colombia’s modern economic history.
09 Verdict
Friday’s 0.86% rebound was welcome but inconclusive. The COLCAP reclaimed 2,300 and closed near the session high — technically constructive. But the index remains trapped below the 2,302–2,316 resistance band that has defined the ceiling since mid-March, and the flat MACD and neutral RSI signal a market that is waiting, not deciding. The BanRep crisis has settled into background noise rather than acute panic, which is progress — but the structural issues remain: 11.25% rates, a >5% fiscal deficit, a suspended fiscal rule, and a polarizing election in 55 days.
Bias: Neutral with election-dependent directionality. The COLCAP is a coiled spring. A Valencia victory on May 31 could trigger a re-rating toward 2,400+ as markets price in fiscal orthodoxy and BanRep normalization. A Cepeda victory would likely pressure the index toward the 2,139 lower Bollinger as investors reprice four more years of institutional confrontation. Until polling clarifies the likely outcome, the index will oscillate in the 2,250–2,316 range. The smartest positioning is asymmetric: underweight heading into the vote with a plan to add aggressively on a market-friendly outcome. Colombia’s fundamentals — demographics, natural resources, geographic position, deep capital markets — have not changed. What is uncertain is the institutional framework governing the next cycle.
This report was published by The Rio Times. For daily coverage of Latin American markets, read our Latin American Pulse and Brazil Morning Call.
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